Diversify your Retirement Funds

Investors with self-directed IRAs and Solo 401(k)'s have an excellent option to diversify their retirement assets outside of stocks and bonds into real estate investments. Avestor supports capital from self-directed IRAs and Solo 401(k) accounts. We have provided answers to some frequently asked questions.

What is a Self-Directed IRA?

A self-directed individual retirement account (SDIRA) is a type of individual retirement account (IRA) that can hold alternative investments. While the account is administered by a custodian, the account holder is responsible for managing its assets. Thus the name, "Self-directed". Self-directed IRAs are best suited for more sophisticated investors who want to participate in alternative investments and get the benefits of a tax-advantaged account.



Can I transfer self-directed IRA funds or Solo 401(k) funds into my existing account?

No. Investors need to set up a separate account for retirement funds.



Can I invest through a self-directed IRA and Solo 401(k)?

Accredited investors can join an Avestor real estate fund using capital from a self-directed IRA through a custodian. Investors can also send money directly from their Solo 401(k) plans.



Does Avestor charge fees for supporting self-directed IRAs or Solo 401(k)'s?

Avestor does not charge any fees for accepting self-directed IRA or Solo 401(k) funds. For Self-directed IRAs, each custodian has their own fee structure to maintain self-directed IRA accounts. Investors should check with their custodian on any fees for their accounts.



What is the process for completing an investment?

For Solo 401(k)s, you can send money directly to Avestor. For SD-IRAs, each custodian has different processes to fund an investment. We recommend you research various custodians to determine which one best suits your needs. Different custodians require different information on your investment so please make sure to understand their requirements prior to setting up an account with them.



Is all income from investments tax-deferred?

Interest received from investments is generally tax-deferred. For Self-Directed IRAs, on equity investments, most income is tax deferred but you may receive Unrelated Business Taxable Income (UBTI) from some equity investments. Any UBTI income would be taxable. Any pass through UBTI will be reported to your on your Avestor K-1. Please work with your tax accountant to ensure you pay any necessary taxes on UBTI income.



Which custodians can I open a Self-Directed IRA with?

Avestor has partnered with the following SD-IRA custodians: 1) AltoIRA - www.altoira.com 2) Millenium Trust Company - www.mtrustcompany.com 3) Madison Trust - www.madisontrust.com 4) Advanta IRA - www.advantaira.com



What is a Solo 401(k)?

A Solo 401(k) is a retirement account design for self-employed or businesses with with no full-time employees. The Solo 401(k) plan offers many of the same benefits as a traditional 401(k) plan. It allows the business owner to make contributions as both the employer and the employee, maximizing their contributions. Contribution limits to a Solo 401(k) plan are higher than traditional plans. The 2020 contribution limit is $57,000. If you are over the age of 50, the limit is increased to $63,000.



Fee Information:

While Avestor does not charge any fees to support SD-IRA accounts, custodians do charge fees. Click on the links to get more detailed information on fees charged by custodians to manage or SD-IRA accounts.